Subject: XG: Presentation at Asia Society, NY

Presentation by His Excellency Kay Rala Xanana Gusmão

East Timor: Challenges and Opportunities for the Future Asia Society, Council On Foreign Relations, 25 September 2002

Mr. Nicholas Platt,

Dear Friend, Ian Martin,

Ladies and Gentlemen,

Thank you for taking the time to attend this conference on East Timor co-organised by our hosts, Asia Society, and the Council on Foreign Relations.

It is indeed a privilege to be here with you today and we wish to express our appreciation to the Asia Society for hosting this event.

When we discussed the theme for this conference East Timor: The Challenges and Opportunities Ahead we realised that it covered a whole range of questions raised during the consultation process and debate of our vision for the year 2020 to be embodied in the Strategic National Development Plan.

Education, health and security are some of the main aspirations expressed by our people during the consultation. These priorities impressed us greatly in that the current situation would have led many to believe that instead of this forward-looking approach, our people would prioritise and focus on their immediate needs, given the levels of malnutrition, unemployment and extreme poverty of our population. But they also encouraged us to look ahead and device the major guidelines and goals for our Development Plan.

This is an ambitious Plan that focuses on the main goal and daunting challenge: poverty eradication and ensuring the improvement of the living standards of our population.

Twenty five years of war, which ended in extensive violence and overall destruction of the country’s social and economic fabric and infrastructure have left the East Timorese deprived of basic material and psychological security and bred feelings of lack of safety. Two and a half years of transition to independence under a UN administration provided the basic structure for the independent country but the major challenges are ours and there for us to face.

We have identified peace and stability as the two foundations and key requirements for all, and steps must be taken towards ensuring the future our people aspires.

We are often questioned about ¡°security¡± in East Timor, in terms of social and political stability. Such inquiries reflect people’s concerns about a non-peaceful social environment. With a high level of unemployment and lack of resources the rule of law is or will not be sufficient to provide the ideal social stability.

Allow me to elaborate on some of the domestic, regional and international circumstances that will impact on the development of our process.

East Timor is a small country with a population of about 850,000 people. It is a poor country with a per capita income of less than US$500 a year, with 41% of its population living under the absolute poverty line on less than 55 US cents a day. We need to improve the overall development of the nation, increase the income levels through economic growth and, as above-mentioned, aim this at eradicating poverty.

However, we do benefit from some advantages. The main one is that as a newly independent country, we can learn from both the mistakes and the successes of other countries. The advantage of being a latecomer provides the opportunity to avoid mistakes that have trapped many other poor countries.

For those who followed the path of national recovery in East Timor, you will agree with me that the avenue of sustained development is a positive one and it is the one we have chosen.

The process of building democratic institutions is ongoing, although time will be needed to consolidate them; the public administration apparatus is in place, although much still needs to be done to achieve efficiency and the standards of good governance. The awareness and definition of priorities are there. The tools needed to operate major changes and to embark on the road to sustainable development have been identified in the vision for 2020 and the guidelines for the National Plan, which are the result of a joint effort of Government and Civil Society.

Our country depends greatly from the support of the international community at different levels. If, on the one hand, such support will be needed for some time at the institutional level, the financial and the peacekeeping levels will gradually decrease. As we restructure and enhance our economy, nurture a democratic culture in our society and establish the much-desired mutual good neighbourly relationship with the countries closest to us East Timor will, to the possible extent in today’s world, gain in sovereignty and global independence.

We have good prospects for the future given our primary sources of revenue in oil and natural gas. However, we have repeatedly stated that our country will not make itself dependent on it. Such revenues will be valuable for investments in major key national infrastructure and for ensuring the well being of our future generations. We will not drain these resources as a form of finding simplistic solutions to today’s problems and setbacks.

Currently, our imports are very high, more than 70% of total trade. This is due to the fact that East Timor imports most basic need commodities, even food such as rice, and capital goods for the reconstruction. To correct this imbalance, East Timor needs investment in productive sectors so as to increase its exports. We will continue to invest in fields such as agriculture, fisheries and tourism. This can only be achieved through a carefully designed strategy of diplomacy, clear economic and financial policies and a transparent legislative framework. Therefore, at the same time, we are thinking of creative ideas on how to encourage foreign direct investment in East Timor by offering fiscal incentives in order to create jobs and bring skills to our people.

Since May 20, when the UN handed over the administration of the country to the democratically elected representatives of East Timor, our diplomacy has been greatly focused in establishing and consolidating our positioning in the region as well as in the world.

Our particular relationship with the region is in itself diversified. East Timor borders South-East Asia and the Pacific. We are bound by cultural links to both regions and we feel we have a contribution to give to both.

In July, I had an opportunity to visit Fiji and attend the 3rd Summit of ACP Heads of State and Government. This participation brought a greater awareness of our need to actively participate in groups of developing countries that share common problems, similar advantages and close backgrounds. There is much we can learn and exchange with sub-regional groups within an organisation as the ACP.

Regardless of our relationship with the Pacific, we are geographically close to South-East Asia and also feel proud of being part of this region. Over the past couple of years, we have intensified our contacts in the region. Today, we are most pleased to testify to the committed work and unwavering engagement our Asian brothers have accorded to the rebuilding of East Timor, to the Peace Keeping Forces and to the numerous professional and skilled demands of the three United Nations Missions deployed in our country.

We have recently participated in the Brunei ASEAN Ministerial meeting and will continue to participate as invited observers to the organisation’s initiatives. Given the present conditions of our country, East Timor will probably apply to join ASEAN in about five years time. Until then, we are committed to further strengthening our relationship with ASEAN as well as bilaterally with its member states.

We believe that respectful and mutually beneficial state to state relationships are a key to peace. However, we also believe that such relationships have much to gain if reinforced by person-to-person exchanges.

Recently, I paid a State Visit to Indonesia where Her Excellency President Megawati Sukarnoputri, her Cabinet, the Parliament and the people warmly welcomed me at large. A month earlier President Megawati honoured us and displayed political courage and true statesmanship in attending the independence celebration in East Timor.

Minister José Ramos-Horta will attend the first meeting of the SouthWest Pacific Dialogue Forum encompassing Indonesia, the initiator of the concept, Australia, New Zealand and Papua New Guinea. It will be a privileged forum to discuss and find means to overcome some of the serious problems affecting our area such as people smuggling, piracy and drug trafficking and to prevent others such as terrorism.

Together with Indonesia and Australia, East Timor has initiated a tri-lateral dialogue.

Australia and New Zealand have been in the forefront of the international efforts to secure peace in East Timor and both have been generous in their support to our development process.

I have just paid an official visit to New Zealand and the commitment to our development process was not only renewed but also further extended.

We share with Australia an important common maritime border containing rich oil and gas reserves. We need to negotiate the delimitation of our common borders. The oil and gas wealth in the Timor Sea can be a blessing or a curse…we hope that it will be a well-managed blessing shared in a just and fair manner for the benefit of our two countries.

Trade and investment should be one of the backbones of our economic development and can be powerful engines guiding the relationship with our neighbours. We need to ensure that foreign investment, at least for the next five to ten years, is aimed at creating jobs and skills transfer for the Timorese, especially the younger generation. 54% of our population is under 20 years of age and 44% under 14 years of age. Some studies claim that in the next 4 years we will have to provide employment to 20,000 new job seekers per year.

Therefore, we deem the relationship between neighbouring regions important in that it may encourage the development of areas which are often closer to other countries than to their own Capital cities. Such exchanges may benefit the impoverished populations which, such as our own, yearn for more dignified living conditions and higher standards of life. We believe that a greater exchange and interaction within the private sector of this region will greatly benefit these populations.

As mentioned before, peace and stability are the absolute requirements for a successful development process. We are committed to an active contribution towards peace and stability.

For this, we deem the on-going reconciliation process as a basis for future consolidated stability in East Timor. Without inner tranquillity and peace of mind no one will engage in the development process or in the participatory democratic system enshrined in our Constitution.

This reconciliation process is diversified in its forms of action and initiatives. The Reception, Truth and Reconciliation Commission is an East Timorese body entrusted to research and examine episodes and events of violence in East Timor dating back to 1974, including the civil war period before the invasion in 1975. According to its mandate and rules of procedure it must prove integrity and be fully impartial. Although it will not investigate the so-called serious crimes, it will centre its activities on acts of violence committed by East Timorese of different persuasions. Its focus will be to encourage dialogue, and through it, reconciliation. It certainly has a huge task ahead and its successful fulfilment is of paramount importance to the future peace and stability within our own borders.

A society such as ours with an extremely long history of colonisation, war and violence, with centuries of absence of respect for human rights, needs to undergo processes such as the reconciliation as designed by the Reception, Truth and Reconciliation Commission. Without this and the opening towards our neighbours and regions, we would be but extending the suffering our people has endured for too long.

Development will have to be a process intimately linked to openness to the world, vision for the future and compromise to serve our people.

As mentioned in the beginning, the challenges are immense. The opportunities are certainly a lot more and greater.

Thank you.

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